And here's some reality, as opposed to cope.
We’re hoping that by some miracle, winter in Europe is extremely mild. But don’t forget, there’s still going to be significant economic damage, much of it exported to the countries that will not be getting that incremental carrier of liquid natural gas. Look at what’s going on in Pakistan today and at what happened in Sri Lanka. As is always the case, the emerging world suffers when the Western world burps. And it’s quite the burp that we have going on in Europe today.
Company CEOs and union leaders are now speaking openly about their fears. "The worst is yet to come," says CEO Klaus-Dieter Maubach of the German natural gas import giant Uniper, referring to energy prices. And Yasmin Fahimi, head of the powerful DGB union, warned in an interview with DER SPIEGEL that if the government doesn't take swift countermeasures, there is a risk of domino effect that could lead to the de-industrialization of Germany. "That would be a disaster."
The question is no longer whether the crisis will come. The question is how bad it will be and how long it will last....
Alexander Becker is desperate. "We really don't know what to do anymore," says the CEO of the Georgsmarienhütte Group (GMH). "We're in a state of shock." The company is one of Germany's larger steel producers. With 21 facilities, 6,000 employees, its own foundries and forgers – and a power requirement of 1 terawatt hour of electricity a year. That's more than the electricity consumption of 300,000 single-family homes. Last year, the company paid 120 million euros for electricity and gas. If prices remain at current levels, costs will rocket to 1.2 billion euros next year. At worst, a loss of 1 billion euros would be incurred in the coming year. "We would be bankrupt immediately," Becker says.
Rival Arcelor Mittal, on the other hand, has given up for the time being. The company recently announced that it would be shutting down two production facilities indefinitely in Hamburg and Bremen due to the "exorbitant rise in energy prices." This had been compounded by weak market demand and a negative economic outlook. The company said it was no longer economically viable to operate all of its plants.
Healthy companies may be able to handle such promotions for a few weeks. But companies already suffering from financial difficulties, like the major department store chain Galeria Karstadt Kaufhof (GKK), are expecting a very tough winter. They simply can no longer afford discount battles. The company, which has already gone through insolvency and is being propped up by the government to the tune of 700 million euros, is seeing its reserves melt away.
Many companies are unlikely to survive. In August alone, the number of insolvencies among corporations and partnerships, mostly medium-sized firms, grew by a quarter year-on-year. For October, Steffen Müller of the Leibniz Institute for Economic Research in Halle predicts an increase of one-third compared to 2021. And this doesn't even take into account the increased energy costs and inflation. Müller expects a structural change in the German economy. Due to the long-term cost increases in energy, wages, intermediate products and interest rates on loans, "some business models are just no longer sustainable." Müller says that weak companies "are now getting flushed out of the market."
Being an occupied country without sovereignty has a price. Prostituting yourself to the world's bully and terrorist has a price.
FYI: "making it through the winter" as a supposedly first world country is no great achievement. And high gas prices are going to lead the German economy to get absolutely wrecked, since it has so many energy-intensive industries. And that's not even considering the second- and third order consequences of all this. Raising the interest rates is going to lead to Southern Europe getting wrecked as well, just to get inflation under control. Who holds a lot of that debts? You guess. All of Europe will go up in flames. And for what? So that Americans can hold on to their empire.
And here's some reality, as opposed to cope.
We’re hoping that by some miracle, winter in Europe is extremely mild. But don’t forget, there’s still going to be significant economic damage, much of it exported to the countries that will not be getting that incremental carrier of liquid natural gas. Look at what’s going on in Pakistan today and at what happened in Sri Lanka. As is always the case, the emerging world suffers when the Western world burps. And it’s quite the burp that we have going on in Europe today.
Company CEOs and union leaders are now speaking openly about their fears. "The worst is yet to come," says CEO Klaus-Dieter Maubach of the German natural gas import giant Uniper, referring to energy prices. And Yasmin Fahimi, head of the powerful DGB union, warned in an interview with DER SPIEGEL that if the government doesn't take swift countermeasures, there is a risk of domino effect that could lead to the de-industrialization of Germany. "That would be a disaster."
The question is no longer whether the crisis will come. The question is how bad it will be and how long it will last....
Alexander Becker is desperate. "We really don't know what to do anymore," says the CEO of the Georgsmarienhütte Group (GMH). "We're in a state of shock." The company is one of Germany's larger steel producers. With 21 facilities, 6,000 employees, its own foundries and forgers – and a power requirement of 1 terawatt hour of electricity a year. That's more than the electricity consumption of 300,000 single-family homes. Last year, the company paid 120 million euros for electricity and gas. If prices remain at current levels, costs will rocket to 1.2 billion euros next year. At worst, a loss of 1 billion euros would be incurred in the coming year. "We would be bankrupt immediately," Becker says.
Rival Arcelor Mittal, on the other hand, has given up for the time being. The company recently announced that it would be shutting down two production facilities indefinitely in Hamburg and Bremen due to the "exorbitant rise in energy prices." This had been compounded by weak market demand and a negative economic outlook. The company said it was no longer economically viable to operate all of its plants.
Healthy companies may be able to handle such promotions for a few weeks. But companies already suffering from financial difficulties, like the major department store chain Galeria Karstadt Kaufhof (GKK), are expecting a very tough winter. They simply can no longer afford discount battles. The company, which has already gone through insolvency and is being propped up by the government to the tune of 700 million euros, is seeing its reserves melt away.
Many companies are unlikely to survive. In August alone, the number of insolvencies among corporations and partnerships, mostly medium-sized firms, grew by a quarter year-on-year. For October, Steffen Müller of the Leibniz Institute for Economic Research in Halle predicts an increase of one-third compared to 2021. And this doesn't even take into account the increased energy costs and inflation. Müller expects a structural change in the German economy. Due to the long-term cost increases in energy, wages, intermediate products and interest rates on loans, "some business models are just no longer sustainable." Müller says that weak companies "are now getting flushed out of the market."
Being an occupied country without sovereignty has a price. Prostituting yourself to the world's bully and terrorist has a price.